Revenge of the Nerds: Banks See Risk, Compliance Hiring Boom

Tough regulations have jolted demand for compliance, risk and legal officers, creating one of the few bright spots in an otherwise dismal job market for the financial industry.

Tough regulations aimed at banks have jolted demand for compliance, risk and legal officers, creating one of the few bright spots in an otherwise dismal job market for the financial industry.

Traditionally one of the least glamorous jobs in the sector, these staff are in hot demand at a time when nearly all other parts of the banking industry are getting cut.

"It used to be a really tough job to sell as people saw it as boring," said Sonia Fuller, director of recruitment firm KS Consulting in Singapore, who said some risk and compliance candidates are asking for raises of up to 50 percent when they change jobs.

With demand outstripping supply, recruiters say compliance staff can be hard to find, and are asking for the biggest salary hikes across the financial industry.

Recruitment firm Robert Half says compliance salaries in Singapore have gone up 10 percent on average in the past year, one of the biggest year-on-year increases across the finance and accounting sectors.

Annual basic pay for an experienced professional in Singapore is now around S$200,000 ($164,000) although head hunters say some candidates are managing to get around S$250,000 - not far from the base salary of a top banker.

Risk officers in banks focus on keeping trading and lending activites within safe limits, while compliance officers ensure the company is meeting the plethora of industry regulations, which have mushroomed in the wake of the financial crisis.

"Now that risk is really briefing the board at every meeting, the risk officer has to be a much more senior level hire with more gravitas, with more influence and communication skills," said Lisa Zonino, a principal at recruiter Egon Zehnder in New York.

Jobs website eFinancialCareers reports that advertisements for risk management roles have seen the sharpest rise in the Asia Pacific region across the financial sector, up 22 percent from last year.

An Ernst & Young survey shows European asset managers increased their compliance staff by an average of 8 percent this year. Anthony Kirby, Ernst & Young's director or regulatory and risk management, said companies are mostly moving existing staff into the compliance positions.

"We had a team of 70 plus growing by 20 percent," Kirby said, referring to one of the companies surveyed.

REGULATION MOUNTAIN

The regulation explosion, along with a string of high profile scandals, means banks and fund managers are setting aside more money to improve their compliance and risk functions, which includes spending on risk technology and financial fraud detection systems.

Compliance operations are being taken in-house, rather than being outsouced to law firms and freelancers as they often used to be prior to the financial crisis.

Craig McNicol, manager of the credit, risk and quantitative finance team at the London office of recruitment firm Morgan McKinley, said risk functions had traditionally been filled by contractors commanding more than 1,000 pounds ($1,600) a day.

"The market is shifting towards demand for permanent hires," he said.

HSBC, reeling from money laundering problems at its Mexican subsidiary, for which it has set aside $700 million to cover fines, has doubled its annual spending on compliance since 2010 to more than $400 million.

"We've heard numbers of anywhere from 10 to 25 percent of non-discretionary, non-risk-related budgets being reassigned to the risk function," said Michael Versace, Research Director at IDC Financial Insights.

In addition to new laws, a driver behind the hiring spree is a desire to avoid ending up on the front page of the newspapers for the wrong reasons.

The Libor scandal, along with Standard Chartered's recent run-in with U.S. regulators over Iran transactions -- not to mention a rogue trading scandal at UBS -- mean boards are more willing to sanction increased spending on compliance, despite it generating no revenue.

A Thomson Reuters survey found 65 percent of compliance officers expected their budget to be higher this year than in 2011.

But finding the right candidates to fill the new job vaccancies has not been easy.

Some head hunters say professionals who have worked at regulators are in hot demand, although others say deep experience as a financial risk and compliance staffer is the ideal choice.

"There are a lot of firms which are having to hire people that haven't had a dedicated compliance function before," said Philippa Allen, chief executive of consulting firm ComplianceAsia. "There is a talent shortage."